Macroeconomic Forecast Colombia

September 2008 | Macroeconomic Forecasts

BMI View: Headline consumer price inflation (CPI) continued to rise in August, up 7.9% y-o-y, well above the central bank's goal of 3.5-4.5%. However, we hold to our view that BanRep has reached the end of its tightening cycle, given that month-on-month inflation is beginning to show signs of slowing, down to 0.2% August from 0.5% in July. Moreover, food and housing prices, the two largest components of the CPI basket by weighting, actually witnessed month-on-month decreases in August, down 0.1% and 6.6% respectively, although with food price inflation at 14.2% y-o-y Colombian consumers are still feeling the effects of rapid price increases.

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